The Role of a Substitute Custodian
In the 1897 edition of Bouvier’s Law Dictionary, the term Custodia Legis is described as: “When property is lawfully taken by virtue of legal process, it is in the custody of the law….” or, In Custodia Legis.
In the United States, it is the U.S. Marshal’s Service (USMS) that is commissioned to secure vessels which are arrested for Court ordered civil matters. In other words, any vessel that is not detained by U.S. Customs, the DEA, or for other criminal actions, falls under the jurisdiction of the USMS.
In maritime law, a vessel can be seized for any qualified legal action. This includes maritime liens and liens for necessaries which, according to the FMLA (Federal Maritime Lien Act) can be, “repairs, supplies, towage and the use of a dry dock or marine railway”. This can also include dockage, crew wages, or any expense that may be considered necessary for the safe and proper operation or security of a vessel.
What is a Substitute Custodian?
A Substitute Custodian (SC) is appointed by the court to act on behalf of the U.S. Marshal’s Service. The reason Marshal’s use custodians is because the volume of arrests outpaces the number of Deputies available to oversee arrested vessels. Additionally, it is assumed that the cost of a U.S. Deputy is greater than that of a civilian employee designated to serve in this capacity. Therefore they use surrogates, companies or individuals that are qualified to act on their behalf. The SC must meet certain qualifications; specifically, they must be able to provide a secure facility to dock the vessel, appropriate staff to oversee its safekeeping, and insurance sufficient to indemnify the USMS against any possible claim for damage or liability.
When a vessel is arrested the Marshal’s Office dispatches Deputies to the vessel’s location. If an SC is being employed, then they will usually be present at the time of the arrest. It can be quite routine or very dramatic, depending on the owner or crew’s response. Generally, two or more Deputies will arrive with an intimidating show of force. They are well armed and make it clear that they mean business. This alone usually averts any altercations during the arrest. The procedure includes placing a copy of the court order just inside the boat’s main entrance and prominently displaying Marshal’s seizure stickers on at least two locations, often on the port and starboard sides of the vessel. A third sticker is placed at the boat’s main entrance and provides information about the arrest. These stickers clearly state that anyone boarding the vessel is subject to immediate arrest and fine.
In many cases the boat remains at the location where it is arrested and a custodian is placed aboard. In some instances it is necessary to relocate the vessel either because it is not safe where she lies or in order to reduce the threat of an attempt to recommandeer the boat by her owner. Often the underlying issue is cleared up in a matter of days, however sometimes an arrest can go on for years. The Defendant generally has the option to post a bond sufficient to cover the Plaintiff’s claim, thus allowing the vessel’s immediate release from arrest.
In order to arrest a vessel there must be a court order mandating a Marshal’s seizure, a deposit placed with the Marshal’s Office (usually sufficient to cover ten days of expenses), and a Notice of Arrest has to be published within ten days. This process usually requires the services of a maritime attorney. Although one can attempt this in pro per, it is not recommended due to the intricacies and nuances of the legal system. Done incorrectly, the plaintiff can find himself as the defendant.
Insurance is required for anyone acting as an SC. Each court has its own requirements, but generally it must be sufficient to cover the value of the vessel and any possible liability that could be incurred in the process of securing and maintaining it.
Fees must be identified in The Motion and Order for Appointment of Substitute Custodian. This generally includes a daily rate for custodial services, a towing charge if required, and any other expenses which may be necessary to affect the arrest and relocation of the vessel. These expenses can be modified by the court or by mutual agreement if needed. The SC may also bill for moorage charges, insurance, and essential maintenance.
A Marshal’s Sale
A seized vessel can end up in a Marshal’s sale if the underlying issue is not resolved in a timeframe which the Court deems reasonable. In such cases the vessel is advertised for sale through an appropriate publication. The terms of the sale are identified and an auction takes place on the court house steps. Such a sale is final and strips away any past or present liens which may have followed the vessel. All claims are paid in the order of priority from the sale proceeds including any amounts due to the SC or other parties sanctioned by the court for payment.
Vessel’s which are sold at auction often have already been offered for sale by the owner or through a broker to no avail. Either the value of the boat is less than the debt, or the owner was not realistic about its value. In any event, if an owner defaults on a mortgage with his lender, that lender must foreclose in order to sell the boat and recoup the debt. The foreclosure process requires a Marshal’s sale. Unless a bidder submits an amount which is acceptable to the lender, generally the lender will be the highest bidder, thus regaining free and clear possession of the asset. So it is important that a seized vessel is properly maintained, in order to maximize its sale price.
Some Substitute Custodians have their own internal sales division and may even have an in-house auction service. This can create a conflict of interest for the various parties involved, and eliminates any brokers who may have been involved prior to the court action. Ideally an SC has only one purpose and motive; to safely secure the vessel and ensure that it is maintained in proper condition.